THE ROLE OF THE OUTGOING CEOIN THE LEADERSHIP TRANSITION PROCESS

The retirement announcement of a nonprofit chief executive officer can provoke any number of reactions from the board: surprise, uncertainty, anxiety, foreboding, even panic. These are natural responses and they illustrate the board’s general awareness that leadership transition is never easy, even for organizations that have strong governance and talented staff.

Especially in the case of a long-tenured leader, the board is tempted to lean heavily on their outgoing CEO to get them through the process of selecting a successor as quickly and seamlessly as possible. In concept, that seems like a reasonable approach. After all, the outgoing CEO has the most in-depth organizational knowledge, has maintained the key donor and stakeholder relationships, holds significant financial accountability and has worked closely with the board of directors on all of the above. In practice, however, having the outgoing CEO take primary responsibility for finding his or her successor is fraught with potential problems.

Informed boards of directors realize that the selection of the chief executive officer is one of the most important responsibilities of effective governance, one that cannot be delegated. They also know that their outgoing CEO would be helpful in the transition process without usurping this singular accountability of the board. The question is: What are the most appropriate and productive ways to involve the outgoing CEO?

Kittleman has managed hundreds of nonprofit CEO transitions. As a result, we have observed a variety of scenarios in which the outgoing CEO has successfully participated in the search and transition process. Drawing on these experiences, we offer the following Dos and Don’ts regarding the outgoing CEO’s involvement Before, During and After the leadership transition process.

BEFORE

Do ask the outgoing CEO, in preparation for the search, to provide the board with the kinds of trend data points, program details and pro forma financial information that will allow them to step back and take stock of the current situation. Often this is accomplished by senior staff who compile certain data and results over the term of the CEO or longer depending on tenure. This retrospective can inform the committee about where they have been as an organization and where they may be in the future. While much of this information may not be new to the board, the intention is to frame it around the discussion about the impending leadership transition.

Don’t ask the outgoing CEO to be a member of the search committee. It may seem like a respectful gesture and a good way to bring intimate organizational knowledge to the committee table. But this has proven to be problematic, particularly with candidates who, when interviewing, will feel uneasy or awkward talking openly with the board about financial, personnel and organizational issues with the outgoing CEO sitting in the room.

Don’t ask the outgoing CEO to write or rewrite or update the job description for the new CEO. The leadership requirements must evolve from the board’s commitment to its vision, mission and future direction which is then matched to the candidate qualifications and experience to be sought. The committee should craft the job requirements only after it understands and reaches agreement with this alignment of organizational direction and candidate competencies. This tactic cannot be delegated to the outgoing CEO if the board is to be accountable as the governing body.

Don’t ask the outgoing CEO to provide the search committee with a list of candidates for the position. However, the committee may ask for the names of thought leaders in the field who could serve as sources of candidates. This might include local or national experts, colleagues from state or national professional or trade associations and leaders in the field who have their own networks of contacts. The CEO should also stop short of nominating certain people to the committee as preferred candidates.

Don’t enter into any agreements with the outgoing CEO for any consulting, employment or project work for the organization that would begin after the new CEO starts. Since you are hiring a new CEO under best practice standards, i.e. that all employees, salaried or contracted, are the responsibility of the new CEO, the discussion of the role of the outgoing CEO is most effectively managed through the discussion and agreement among the board chair, new CEO and outgoing CEO before the new CEO comes onboard. In addition, avoiding any potential conflicts between the new and outgoing CEOs is best achieved when there is no overlap in their positions.

DURING

Don’t involve the CEO in receiving, reviewing or assessing candidate resumes for the search committee. To do otherwise infringes on the important work of the committee and board in vetting viable candidates against the criteria they established. That said, it is not uncommon for the search committee to get the outgoing CEO’s perspective on the finalist or finalists at the end of the process, but only after the committee has gotten that far in the process.

Do ask the CEO to pay close attention to changes in the employee group dynamics. Due to the expected level of anxiety that will manifest itself during the transition, the CEO should make an extra effort to maintain close communication with senior-level management staff. The CEO can help stabilize potentially destabilizing situations if he or she is attentive to such shifts in employee behaviors or attitudes. The CEO can also prevent board members from being drawn into any drama at the staff level during the transition.

Do ask the CEO to play an extremely valuable recruiting role by meeting privately with the final candidate at the very end of the search committee’s process. This is best accomplished sometime before the finalist goes to the board for ratification. The timing of this meeting is crucial to a successful conclusion and it often provides the outgoing and incoming CEOs with an opportunity to establish the kind of relationship that will be most productive and helpful after the transition takes place.

AFTER

Don’t elect the outgoing CEO to serve on the governing board after the new CEO has been selected. This principle should extend to any advisory boards or affiliated organization boards or commissions. Such appointments run the risk of putting the new CEO in compromising or awkward situations when discussing or making changes that were expected by the governing board.

Don’t allow the outgoing CEO to interact with staff regarding issues or problems the employee may have with the new CEO after the transition has occurred. This doesn’t require much interpretation. When it happens it can be disastrous for the organization. The outgoing CEO must be in absolute agreement with this codicil and act responsibly from the first moment this situation may arise.

Do ask the outgoing CEO to provide the new CEO with a list of key stakeholder names in the community for which the outgoing CEO may personally extend an introduction of the new CEO. Major donors, elected officials, civic and business leaders, stakeholder partner groups, and other nonprofit colleagues in the community are typical targets. However, it should be understood that it is in sole discretion of the new CEO to ask the outgoing CEO to get involved in this way. The board can support this policy by making sure the outgoing CEO understands this nuance long before the new CEO is selected.

The outgoing CEO can provide an important service to the search committee but those activities must be focused on the best interests of the organization as it looks to its future. Every situation is different, so it is only through an open dialogue on this issue between the Board and ongoing CEO that those best interests can be accomplished.